Understanding an organization's environment is critical to determining its need for being or becoming an Ever-Changing Organization (ECO). This chapter examines factors in the environment that increase uncertainty and some of the implications of those factors for the design or change of the internal operations and practices of the organization if it is to become an ECO. It is also important to be aware of the components of the environment that are likely to generate forces for change. Included are areas such as changing technology, customer expectations, competitors, suppliers, regulatory agencies, and so on. Organizations will have to address the forces that come from these areas whether or not they are aware of, or prepared for, the changes required. Use of the ECO diagnostic process found provides insight about where an organization is at any point in time and assesses the trends in the environment. The key environmental factors for determining the ECO needs of the organization are described.